Partnership with SonarX enables development of sophisticated crypto indexes using fundamental factors beyond market capitalization.
Move reflects broader institutional adoption trend, with crypto ETFs attracting over $120 billion in managed assets.
Strategic expansion aligns with increasing institutional demand for comprehensive cryptocurrency data and analysis tools.
FTSE Russell, which is backed by the London Stock Exchange Group, is looking to take its indexing business beyond the stock market alone. In line with its new ambition, it has revealed its intent to make room for digital assets as well as on-chain data, even as it seeks to meet the growing interest and demand for cryptocurrency insights, especially among institutional investors.
As the company’s head of digital assets, Kristen Mierzwa, may have highlighted, FTSE Russell has a unique institutional client base. Therefore, this move presents the perfect opportunity to serve them better.
A spokesperson also shed light on the current situation and how this may have influenced the decision of FTSE Russell. The spokesperson Cointelegraph:
“Institutional investors are asking for more data and information [on cryptocurrencies] than in previous years.”
“Institutional investors are asking for more data and information [on cryptocurrencies] than in previous years.”
Meanwhile, FTSE Russell noted in the Tuesday announcement that it will not be making this move alone. The company says it has immediately entered into a collaboration with blockchain data provider SonarX. This partnership, by the company’s estimations, will boost its plans to develop fundamentally weighted crypto indexes using on-chain metrics and market data.
For what it might be worth, fundamentally weighted crypto indexes are not just some type of index. They are peculiar in the way that they use fundamental factors to determine their composition. This means that these indexes offer more intrinsic insights into digital assets than the traditional market-cap-based indexes.
Institutional Adoption Boosts Crypto Integration
Notably, FTSE Russell’s expansion of its indexing is a reflection of what might be a broader trend in traditional finance. As seen in recent years, institutions have been increasingly embracing crypto.
While Bloomberg Terminal over 50 digital assets back in 2022, FTSE also partnered with Grayscale in 2023 to launch an index series covering cryptocurrencies and smart contract platforms.
Meanwhile, it appears that there might be a link between this trend and the rapid institutional adoption of crypto. Rapid in the sense that spot Bitcoin exchange-traded funds (ETFs) launched barely a year ago and have already attracted over $120 billion in assets under management, according to .
With 2024 going down as possibly the biggest year yet for crypto, it might be understandable why FTSE Russell and others are foraying into crypto at this time. Presently, the company provides over 20 stock market indexes. However, its latest move into crypto signals the growing demand for accurate, data-driven insights into digital assets. With the support of SonarX, the company is well-positioned to meet the needs of institutional investors and contribute to the fast-paced crypto industry.
